Clearwater Paper Gets Smaller in Lewiston, Idaho
Lewiston, Idaho, USA 02 August 2018 -- (From news reports) -- Clearwater Paper has trimmed more than 100 positions at its Lewiston tissue operations as its net earnings slip.
The company confirmed Wednesday in a conference call that it went through with previously announced downsizing. The conference call for stock market analysts was broadcast on the internet following the release of the company's 2018 second-quarter financial performance.
Clearwater Paper's net earnings were $6.96 million for the three months that ended June 30, roughly $1 million less than for the same time last year. For the first six months of the year, its net earnings were $9.56 million, compared with $15.5 million for January through June in 2017.
"We have reduced over 100 mill positions," said President and CEO Linda K. Massman. "We have shut down some (tissue) converting lines that just don't have the volume to be running."
Eliminating the jobs began in June and is mostly complete, leaving Clearwater Paper with about 1,300 employees in Lewiston, where it also makes paperboard, said Shannon Myers, a spokeswoman for the company.
Most of the reductions came through not filling vacant positions and voluntary retirements, Myers said.
Separately, Clearwater Paper hired a consultant to help it lower administrative expenses $20 million a year by 2019, a move also shared with stock market analysts. The company has shed an undisclosed number of jobs as a part of that effort and is continuing to do so in communities that haven't been named, Myers said.
The belt-tightening is meant to help improve performance.
In the last quarter, tissue did as expected while Clearwater Paper's paperboard operations, which constitute about half of its business, exceeded company expectations with record production and shipments, Massman said.
"Those results were achieved in spite of a competitive tissue market and high external pulp prices and transportation costs," Massman said in a news release.
Clearwater Paper's paperboard goes into products such as packaging and paper dishes. Its tissue is sold as toilet paper, paper napkins, paper towels and facial tissue at retailers under store brands.
One of its major customers for that segment, Kroger, is ordering less, and Clearwater Paper is still looking to replace about 40 percent of that business.
A number of initiatives are expected to help the company in coming months.
In Lewiston, a $160 million upgrade featuring a new pulp digester "continues to ramp up" producing more pulp with better quality, Massman said. So far it is saving $10 million a year, compared with the $30 million a year it is predicted to eventually save.
Clearwater Paper will be better positioned to meet the demand for upper-end tissue products with the addition of a new $330 million paper machine at its Shelby, N.C., mill, which is on schedule and will start running in the first part of 2019, Massman said.
Capital upgrades aren't the only way that Clearwater Paper is hoping to improve its bottom line.
"The price increases we announced last quarter for certain products and grades of tissues are being implemented and will help to mitigate the rising input costs for external pulp and transportation," Massman said.
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